In 2013, total production of the pharmaceutical industry in Mexico reached US$14.3 billion according to ProMéxico. As a pharmerging (pharma emerging) country, there are several advantages of doing business in Mexico, for instance manufacturing costs are 18.6% lower than in the US, making it more competitive than other countries such as Canada, Brazil, and Germany. The drug manufacturing landscape also changed thanks to the withdrawal of the clause that stated that companies willing to sell pharmaceutical products in Mexico needed a plant to do so. This led several pharma companies to close their plants, while some others have strategically chosen Mexico as a manufacturing hub due to its closeness to the US, and its relevance in the Latin American region.

Manufacturing costs in several countries compared to the US. Source: ProMexico

Manufacturing costs in several countries compared to the US. Source: ProMexico

Here are some examples of multinational and local companies expanding their manufacturing capabilities in Mexico:

Boehringer Ingelheim – The fifth largest pharmaceutical company in Mexico invested MX$400 million in a new plant for the production of 40 million units of novel anti-diabetic drugs. The plant was inaugurated in November 2015 and will be certified to Health Canada, FDA, and EMA standards as it is intended to export 80% of its production.

Takeda – The global gastroenterology leader is finishing its brand new facility for the cutting-edge, FDA accredited, production of drugs that will be exported to the US and Latin America. This is in continuation of the company’s manufacturing operations in Mexico that started in 1961 already exporting to 16 countries.

Liomont – This Mexican branded generics and OTC leader is recently focusing on biotechnology, and is currently building a plant in Ocoyoacac, State of Mexico, for the production of Flublok, the world’s first DNA-based vaccine for influenza.

Boehringer Ingelheim plant

Boehringer Ingelheim plant

Landsteiner Scientific – One of the Mexican top sellers to the public sector is moving its entire production lines to a new plant in Toluca, State of Mexico.  Furthermore, it will keep its current facilities and adapt them to fully produce high specialty drugs that require a separate manufacturing site.

Hetlabs – This affiliate of the Indian Hetero Drugs acquired a facility in 2015 and rebuilt it to manufacture biosimilars and oncology drugs. Adrian Ruiz, Director General of Hetlabs Mexico is confident that while the country has low manufacturing costs similar to those in India, the performance of Mexican workers and professionals is higher than many other countries.

Laboratorios Pisa – This local giant already has 11 plants throughout the country, and recently invested MX$300 million in three new sections of an existing plant in Tlajomulco, Jalisco. This will enable the company to expand its production of injectables, oral solids, and solutions.

While there are several advantages of manufacturing in Mexico, such as lower costs, high-performing workforce, regulatory agreements and recognitions, and the country’s strategic geographic position, experts believe that the authorities should be more proactive in providing fiscal incentives and accelerating authorization processes. “The government should play a much more active role in supporting companies with new infrastructure initiatives, and the country should be independent in terms of providing healthcare to the population through local manufacturing and infrastructure”, stated Alfredo Rimoch, CEO of Liomont in a recent interview with Mexico Health Review 2016.

If you like this post, you might also like:

A New Vaccine for a Modern Pandemic

Share →

Leave a Reply

Your email address will not be published. Required fields are marked *